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Alaska Permanent Fund seeks incentive pay for managers

December 20, 2018

JUNEAU, Alaska (AP) — The Alaska Permanent Fund Corp. wants to pay its investment managers incentive compensation, which officials said is needed to recruit and retain talented employees.

The board presiding over the nearly $64 billion fund adopted a policy earlier this year to start paying incentives worth up to 50 percent of investment managers’ salaries, KTOO Public Media and Alaska Public Media reported this week.

The board’s incentive compensation request is included in its annual budget request, which must be approved by Gov. Mike Dunleavy’s administration and the state Legislature.

The state employees who manage the fund’s investments would receive incentive pay based on a combination of how the fund and the assets they manage perform. Incentive pay would be based on performance over the last five years.

Incentive compensation systems can be complicated, but the corporation aimed to keep it concise, CEO Angela Rodell said.

“Let’s keep it very simple and straightforward and very tangible for people to grasp that investors making investment decisions will benefit from the positive decisions that they make and they won’t benefit from the negative decisions they make,” Rodell said.

The corporation has struggled to recruit and retain investment managers because it lacked an incentive compensation system, officials said.

“We are on the fourth chief investment officer in the last 10 years, so that’s a pretty high turnover for that position, and that one in particular concerns the board,” Rodell said.

Providing incentive compensation is a reasonable discussion to have, said state Revenue Commissioner Bruce Tangeman, a member of the corporation’s board.

“Obviously, the permanent fund is a rather large endowment,” he said. “And it’s critical that we have the best and brightest managing that on our behalf.”

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Information from: KTOO-FM, http://www.ktoo.org

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